Singaporeans are becoming poorer and having less disposable income after 4 years of PAP rule, according to the latest release of the authoritative international study ‘Prices and Earnings’ conducted by UBS.
Singapore is now ranked the 11th most expensive city in the world, but Singaporeans are only ranked a pathetic 43th and 49th in domestic wages and purchasing power respectively, along the likes of developing countries like Turkey, Slovakia and Qatar and far below the capitals of other Asian Tigers – Seoul, Taipei and Hong Kong.
Even the Malaysians now have a higher domestic purchasing power than Singaporeans though their wages are lower than ours.
The mismatch between the GDP growth of the state and the relative poverty of Singaporeans is caused largely by the PAP’s immigration and labor policies which have allowed foreigners from all over the world to come and work in Singapore with little screening or control which is almost unheard of in other First World countries.
A Wall Street Journal editorial last year reported that the relentless influx of foreigners has depressed the wages of ordinary Singaporeans, increased the cost of living and led to an overall decline in the standard of living.
Latest statistics from the Manpower Ministry showed a gradual decline of the average monthly income of Singaporeans while inflation hit a record high of 3.8 percent in November 2010.
Prices of resale HDB flats have grown by 13.3 percent in 2010 and a shocking 51.3 percent since 2007, pricing many ordinary Singaporeans out of the open market.
Despite the statistics showing that Singaporeans have fared worse after 4 years of PAP rule, Prime Minister Lee Hsien Loong continued to harp on Singapore’s ’spectacular’ GDP growth last year which is artificially inflated by a ‘rebound’ from a low baseline in the previous year and by the massive import of cheap foreign workers which boost demand in services and decrease labor costs.
The multi-million dollar salaries of PAP ministers is pegged to GDP growth – the higher the growth, the more money they bring home though the rest of the population may not be enjoying the fruits from the growth.
---------------------------------------------
Singapore's record 14.7% growth for 2010....
By Shamim Adam
Jan. 1 (Bloomberg) -- Singapore’s economy may be supported by a “strong” Asia as growth cools in 2011 from a record pace last year, according to Prime Minister Lee Hsien Loong.
Gross domestic product rose 14.7 percent in 2010, Lee, 58, said in his New Year message released in Singapore yesterday. That compares with the government’s November forecast of a 15 percent expansion. The trade ministry predicts the economy will expand 4 percent to 6 percent this year, an estimate reiterated by Lee.
“In Asia, growth momentum is strong,” Lee said. “China and India are forging ahead, and countries in Southeast Asia are growing steadily. Hopefully Asia will continue to do well despite the weakness in developed countries, and create a favorable regional environment for Singapore.”
Asia led a global recovery last year as growth in developed markets was restrained by Europe’s sovereign credit woes and U.S. unemployment that remains above 9 percent. Singapore’s rebound has fueled inflation, prompting the central bank to allow faster currency gains and leading the government to implement measures to cool the property market.
“Inflation risks for Singapore appear to be tilted toward the upside,” Alvin Liew, a Singapore-based economist at Standard Chartered Plc, said before Lee’s message. After getting a boost from manufacturing last year, Singapore’s tourism and financial services industries will increasingly drive growth in 2011, spurred by “rising regional domestic demand from China and Southeast Asia,” he said.
Currency Appreciation
The Monetary Authority of Singapore said in October it will steepen and widen the currency’s trading band while continuing to seek a “modest and gradual appreciation,” after undertaking a one-time revaluation in April. The central bank, which uses the exchange rate rather than a benchmark interest rate as its main tool to manage inflation, guides the Singapore dollar against a basket of currencies within an undisclosed band.
The Singapore dollar climbed more than 9 percent against the U.S. currency last year, marking its biggest one-year gain since 1994 and the fourth-best performance in Asia excluding Japan. The currency, which rose 0.6 percent to S$1.2823 versus the U.S. dollar yesterday, may strengthen to S$1.24 at the end of 2011, according to a central bank survey of economists published last month.
Inflation will average between 2 percent and 3 percent this year, the central bank predicts. Consumer prices rose 3.8 percent in November, the biggest increase in 22 months.
Fastest Growing
Singapore’s estimated expansion for 2010 would make the city of 5 million people the fastest-growing economy in the world after Qatar’s, according to International Monetary Fund estimates.
“The outlook for the world economy is mixed,” Lee said. “The U.S. economy is still weak. Europe faces serious debt crises in Greece, Ireland and a few other countries.”
The economy grew 12.5 percent in the fourth quarter from a year earlier, Lee said. That compares with the 13.2 percent median estimate of 12 economists surveyed by Bloomberg News.
GDP probably increased about 6.5 percent last quarter from the previous three months, based on the year-on-year number given by Lee, said Song Seng Wun, an economist at CIMB Research Pte in Singapore. Liew at Standard Chartered estimates growth of 6.3 percent. That compares with the median forecast for an annualized 9.4 percent expansion in a Bloomberg survey of eight economists.
The economy contracted 18.7 percent from July to September. The trade ministry will release the fourth-quarter economic report at 8 a.m. on Jan. 3.
Companies Expand
The island’s biggest companies are boosting operations or expanding overseas as the global economy recovers from a slump in 2009. DBS Group Holdings Ltd., Southeast Asia’s biggest bank, said last month it will take over Royal Bank of Scotland Group Plc.’s retail and commercial banking businesses in China.
Neptune Orient Lines Ltd., owner of Asia’s second-largest container line and controlled by Singapore state-investment fund Temasek Holdings Pte, in July signed a $1.2 billion contract for as many as 12 vessels with Daewoo Shipbuilding & Marine Engineering Co.
Singapore, the second-busiest container port globally, is located at the southern end of the 600-mile (966-kilometer) Malacca Strait, the world’s busiest sea lane. The island has remained vulnerable to fluctuations in overseas demand for manufactured goods even after the government boosted financial services and tourism.
Lure of Casinos
The country’s first casinos opened last year as part of so- called integrated resorts run by Genting Singapore Plc and Las Vegas Sands Corp., luring tourists to their gambling centers, restaurants, malls and a Universal Studios theme park.
“The tourism-related sectors continued to do well as Singapore continued to hit record tourist arrivals month after month so far in 2010, with a significant role played by the integrated resorts,” said Liew of Standard Chartered. The casino-resorts “may have added 1 percentage point to headline GDP growth in 2010, excluding the potential spillover impact to other tourism-related industries such as hotels, food and beverage and even the real estate market.”
The city state added 82,000 jobs in the nine months through September, pushing the unemployment rate to 2.1 percent, the lowest level in 2 1/2 years. Average wages before adjusting for inflation rose 5.4 percent in the third quarter from a year earlier.
“Singapore is not without challenges and problems,” Lee said. “We have to manage the inflow of foreign workers and immigrants, keep home ownership affordable to all, and help low- income Singaporeans cope with the cost of living.”
-----------------------------------------------
By Topsage...
Consider the following statistics of life in Singapore:
1. Singaporeans work the most number of hours per week in the world.
2. Most Singaporeans will never own a car because COEs are limited.
3. The Average home of a Singapore has fallen from 1660 sq feet to about 1000 sq feet in the past decades.
4. Fertility rate in Singapore has fallen to below Japan among the lowest in the world.
5. Less half the Singaporeans can meet the minimum sum for CPF retirement accounts. Meaning many will never retire.
6. 17% of Singaporeans do not have medical insurance. The highest in the developed world give and take a few % compared with USA.
7. Singapore has the fastest growing foreigner population per capita in the world. Within a decade, the majority of people in Singapore will be foreign born.
8. Singapore has the highest paid political leaders in the world....
9. Singapore has the highest income gap of all developed countries.
10. More than one person kills himself/herself everyday. Yesterday a woman killing herself fell on another woman to give a death toll of 2.
11. Singaporeans have the highest savings rate in the world due to CPF but many still can't retire.
12. The Singapore parliament has the fewest opposition in terms of % of seats in the world among countries that claim to be democratic...of course we are also democratic.
13. Singapore bans chewing gum but legalise casinos. Casinos are legalised in only 2 of the 50 American states.
14. Singapore hangs the most people per capita in the world. Even more than China....don't believe as this feller called Shadrake.
15. Singapore cars are the most expensive in the world.
16. Singaporeans have the lowest purchasing power among all developed countries according the UBS...even Malaysians have higher purchasing power.
17. Singapore govt has the highest sovereign wealth fund per capita. ..and among the top few in absolute terms.
18. Singapore spends more on defense than Malaysia and Indonesia combined - so I guess we don't need too much diplomacy and or diplomats
can afford to badmouth them according to wikileaks. Now that they know, we better spend a $100M extra this year on defense.
17. Singapore has the No.1 civil service in the world according to Minister Lim Swee Say. I want to add we also have No.1 civil service in terms of pay for the top echelon. Some can afford french cooking lessons.
18. Singapore has only one news paper company called SPH that produces hoard of quality papers such as Straits Times, Sin Miin and other reading delights. We had 5 newspaper companies a few decades ago, I guess this business is in decline even as the population increases.
19. Singaporeans serve NS for 2-2.5 years, this is the longest in the world after Israel. We do it because we can afford the time. Many Singaporean workers will work their whole life without retirement anyway so what is the diff. putting aside 2 years.
20. Singapore has the world's oldest and wisest politician. His name is Lee Kuan Yew. As long as he is around, the good life for Singaporeans will continue. He will make sure of that.
21. Lee Kuan Yew's son is Lee Hsien Loong who coincidentally became PM due to his own merit. His New Year Message this year asks Singaporeans to be more RESILIENT. I guess we better be given all the points I wrote above.
22. Singapore has the most expensive public housing in the world....but according to Minister Mah, it is still affordable.
Showing posts with label UBS. Show all posts
Showing posts with label UBS. Show all posts
Saturday, January 1, 2011
Friday, September 25, 2009
GIC huge paper lost on UBS investment
From: "AleXX"
Date: Thu, 24 Sep 2009 00:18:10 +0800
Local: Thurs, Sep 24 2009 12:18 am
Subject: Re: GIC huge paper lost on UBS investment
"truth" wrote in message
> Meanwhile, GIC's investment of 11 billion Swiss francs in mandatory
> convertible notes issued by UBS in March 2008 has taken a much worse
> battering than its Citi venture, despite various safeguards that were also
> built into the investment agreement with UBS.
> According to UBS's latest annual report, the UBS notes held by GIC must be
> exchanged for ordinary shares by March 5 next year, giving GIC an
> estimated 228.83 million shares.
> At Monday's closing price of 19.27 francs for UBS shares, those shares
> would be worth just 4.41 billion francs, or about 6.6 billion francs less
> than its original investment of 11 billion francs.
> Including the two yearly coupons of 9 per cent, or 990 million francs
> each, that GIC is entitled to over the two-year term of the UBS notes it
> holds, UBS's share price would have to reach 39.4 francs for GIC to break
> even on its investment in the bank, based on the current terms of
> conversion.
Looks like when he lost $Billions, you have to search for the small print in
the shit times for the news. But when he $millions, his propaganda
newspapers will help him to yell on top of his voice to the world.
Date: Thu, 24 Sep 2009 00:18:10 +0800
Local: Thurs, Sep 24 2009 12:18 am
Subject: Re: GIC huge paper lost on UBS investment
"truth" wrote in message
> Meanwhile, GIC's investment of 11 billion Swiss francs in mandatory
> convertible notes issued by UBS in March 2008 has taken a much worse
> battering than its Citi venture, despite various safeguards that were also
> built into the investment agreement with UBS.
> According to UBS's latest annual report, the UBS notes held by GIC must be
> exchanged for ordinary shares by March 5 next year, giving GIC an
> estimated 228.83 million shares.
> At Monday's closing price of 19.27 francs for UBS shares, those shares
> would be worth just 4.41 billion francs, or about 6.6 billion francs less
> than its original investment of 11 billion francs.
> Including the two yearly coupons of 9 per cent, or 990 million francs
> each, that GIC is entitled to over the two-year term of the UBS notes it
> holds, UBS's share price would have to reach 39.4 francs for GIC to break
> even on its investment in the bank, based on the current terms of
> conversion.
Looks like when he lost $Billions, you have to search for the small print in
the shit times for the news. But when he $millions, his propaganda
newspapers will help him to yell on top of his voice to the world.
UBS survey shows Singapore slipping in standard of living
From: "truth"
Date: Wed, 30 Sep 2009 03:58:40 GMT
Local: Wed, Sep 30 2009 11:58 am
Subject: The fall of Singapore has begun
http://www.yawningbread.org/
UBS survey shows Singapore slipping in standard of living
--------------------------------------------------------------------------
The Straits Times did a rather courageous thing on 26 September with
a feature on the latest Price and Earnings survey from UBS Bank. The survey
(field work March 2009) painted a rather unflattering picture of Singapore.
In a nutshell, it showed that Singapore is ranked as one of the
world's more expensive cities to live in, but people here earn only middling
wages. The result is that our purchasing power is far from sterling.
Compared to the last time the survey was carried out, in 2006, it also shows
a worsening trend.
The Straits Times wrote:
Singapore's worsened placing... highlights two possibilities: either
that consumption has become more costly, or pay packets have become lighter.
Both are worrying trends which could have crept into the country, serving a
double whammy to residents who are feeling the pinch from the downturn.
What accounts for the trend? More importantly, what are the social
and political costs if they persist?
Indeed, these are good questions to ask.
Another thing struck me from the survey: Whereas we tend to visualise
Singapore's economic standing in Asia as tied with Hong Kong for second
place to Japan, in many respects this is no longer true. Hong Kong is now
clearly ahead. Seoul has overtaken Singapore on many counts, Taipei too has
by some measures. Singapore has slipped.
Has our economic decline begun? I have argued many times previously
that decline begins with slippage in relative performance vis-à-vis our
neighbours. We won't feel poor initially. Life can still be very comfortable
and even be improving gradually as we slide gently into the second, then
third tier.
And there will be plenty of excuses available to help us deny that
sunset has begun.
For example, when the newspaper contacted Member of Parliament Seah
Kian Peng for his comments regarding the survey results, he said,
"The figures may be right, but the conclusion could be wrong."
Rather than look at prices and wages in isolation, he says the key
consideration should be: Do Singaporeans lead a better life than they did in
the past and are the poor taken care of?
"If the answer to both is yes, then moving up or down two notches
becomes mere semantics," he says.
UBS has been doing this kind of survey triennially since 1971. In
2009, it covered major 73 cities around the world, fifteen of which are in
the Asia-Pacific region.
Prices - global ranking
Prices are computed from a basket of 122 items, based on a Western
European lifestyle. The mix can be seen in the table at right. Some may ask
how representative his basket is compared to the Singapore lifestyle, but
seeing how westernised Singaporeans have become, I don't think it makes much
of a difference.
Singapore was ranked 24th out of 73 cities worldwide, only slightly
cheaper than Amsterdam (rank 23) and London (rank 21). Tokyo was 5th out of
73 cities and Hong Kong 28th.
Three years earlier, Singapore's price-ranking was 32. We climbed 8
places in the interim period, not the "two notches" that Seah spoke about.
If one adds rent to the basket, Singapore shoots up the 2009 worldwide
rankings from 24th (basket without rent) to 15th place (basket plus rent),
making us MORE expensive than London and Amsterdam. Tokyo goes up to 3rd
place. Hong Kong shoots up even more dramatically than Singapore to 11th.
Wages - global ranking
Wages are calculated from averages from 14 common occupations ranging
from unskilled (e.g. building labourer) to engineers and department heads.
UBS' report explained in its introduction that:
The data we collected includes standard local incomes and working
hours in addition to local consumer prices. The survey asked 112 questions
on wages, payroll taxes and working hours for 14 separate occupations. The
survey was conducted with a representative sample of companies, and
participants profiles were defined with maximum specificity with respect to
marital status, work experience and education.
In the net wages ranking, Singapore was placed 41st out of 73 cities,
thus the word "middling" I used above.
* * * * *
Comparing with Asia-Pacific cities
To better show where we stand in relation to our neighbours, the
charts below refer to the fifteen Asia-Pacific cities included in the
survey.
The first chart shows the relative price of the basket of 122 items,
without rent, indexed to the price of the same basket in New York. Singapore
is in second place, with Hong Kong very close.
If we look at wage levels from the 14 occupations, Singapore is
nowhere near second place. We stand lower than Seoul and Taipei, and we're
only twice the level of wages in Shanghai. We've been surpassed, with others
catching up.
(Note: the chart is based on net wages, which means wages net of
taxes, social security contributions, etc)
Purchasing power is a function of wages and prices. Since we have high
prices and middling wages, the purchasing power is not a pretty sight. We
rank 8th out of 15 Asia-Pacific cities. Even the average guy in Kuala Lumpur
can afford a better standard of living than us.
* * * * *
Why prices so high?
What is wrong with prices in Singapore? It's hard to say. The survey
does not contain enough data for us to tease out the problem. It may also
fail to account for quality. Take, for instance, this chart showing the
price of public transport:
As you can see, Singapore is one of the more expensive places, but
you'd have to be blind to think that the quality of public transport in
Manila or Mumbai is anything comparable to Singapore's.
However, the next chart may give us a clue as to how prices are pushed
up. On the left is the number of minutes the average person must work to
earn enough to buy 1 kilogram of uncooked rice. On the right is the number
of minutes of work needed to buy one McDonald's Big Mac.
Most places require less than twice the working time to buy a Big Mac
compared to buying 1 kg of rice. Singapore is one of the few places that
requires more than twice, in common with cities like Jakarta, Kuala Lumpur,
Manila and Mumbai -- not quite the set we normally imagine ourselves to
belong to.
What differences are there between uncooked rice and a Big Mac? Rice
has far fewer domestic inputs. We buy what has been imported, adding on a
little cost for storage, transport and retail space. Thus our purchasing
power over rice is really derived from the strength of the Singapore
Dollar's exchange rate.
A Big Mac includes many more domestic cost inputs. The buns are baked
locally, there is the rental cost of kitchen and dining space, power and
water, plenty of staff, disposal of trash, licences, etc. It appears that
our purchasing power is degraded by our own domestic cost inputs.
Another look at domestic cost inputs can be found in services. The UBS
survey has this to say:
Service prices reflect local labor costs
To compare global service costs as accurately as possible, we
analyzed a basket of 27 services. They ranged from classic expenses such as
haircuts, phone charges, dry cleaning, movie tickets and restaurant meals to
newer services of everyday consumption, including DSL Internet, training and
continuing education courses and tickets for a variety of leisure
activities. We have responded to the broader changes in consumption habits
by increasing the weight of services in our study from 20% to 22% in our
total basket of goods and services.
Here are the fifteen Asia-Pacific cities:
As you can see, Singapore is the second-most pricey of the lot. Does
this mean that our wages are high? Despite what UBS wrote, not necessarily.
What you pay in the price of services ultimately goes to more than wages; it
also goes to corporate profit and reinvestment as well as to the government
in the form of taxes and levies (including the Development Charge, which in
turn pushes up rents), and used for paying a bureaucracy, the military and
infrastructure investment. It can also be parked away through surpluses as
reserves.
As shown in the second chart above (wages), our wages aren't the
second highest in the Asia-Pacific. This suggests that the (second highest)
price of services here reflect more the elements of corporate profits and
government take. Our workers do not benefit commensurately form the high
price charged for services. Corporate profits may be kept up through the
lack of competition while the slice taken by the government stems from
political decisions.
How true is this? Economists might want to study the matter.
* * * * *
Four occupations
Now, let's look at the wages computed for four occupations. The next
two charts show data for a car mechanic and a cook:
The Singaporean car mechanic is paid significantly less than his
counterpart in Hongkong, also less than the guy in Taipei, and not much
differently from the mechanic in Seoul.
The Singaporean cook earns less than the guy in Seoul too.
The next two charts look at the higher end of the job scale: product
managers and engineers.
Among product managers, the Singaporean one is paid third highest
among the 15 cities; among engineers, fourth highest.
Our economy seems to be one where we have an extraordinary gap between
the powerful and the powerless, even by Asian standards -- countries not
known for soft-hearted socialism. Average wages for Singapore as a whole are
pulled down the city rankings because our low-paid are so lowly paid.
Meanwhile, one suspects that our prices seem to be kept up not so much by
labour costs but by profit-taking and the government's share.
With the resulting degradation of purchasing power, one can then ask:
Is the average Singaporean really having it so good?
© Yawning Bread
Date: Wed, 30 Sep 2009 03:58:40 GMT
Local: Wed, Sep 30 2009 11:58 am
Subject: The fall of Singapore has begun
http://www.yawningbread.org/
UBS survey shows Singapore slipping in standard of living
--------------------------------------------------------------------------
The Straits Times did a rather courageous thing on 26 September with
a feature on the latest Price and Earnings survey from UBS Bank. The survey
(field work March 2009) painted a rather unflattering picture of Singapore.
In a nutshell, it showed that Singapore is ranked as one of the
world's more expensive cities to live in, but people here earn only middling
wages. The result is that our purchasing power is far from sterling.
Compared to the last time the survey was carried out, in 2006, it also shows
a worsening trend.
The Straits Times wrote:
Singapore's worsened placing... highlights two possibilities: either
that consumption has become more costly, or pay packets have become lighter.
Both are worrying trends which could have crept into the country, serving a
double whammy to residents who are feeling the pinch from the downturn.
What accounts for the trend? More importantly, what are the social
and political costs if they persist?
Indeed, these are good questions to ask.
Another thing struck me from the survey: Whereas we tend to visualise
Singapore's economic standing in Asia as tied with Hong Kong for second
place to Japan, in many respects this is no longer true. Hong Kong is now
clearly ahead. Seoul has overtaken Singapore on many counts, Taipei too has
by some measures. Singapore has slipped.
Has our economic decline begun? I have argued many times previously
that decline begins with slippage in relative performance vis-à-vis our
neighbours. We won't feel poor initially. Life can still be very comfortable
and even be improving gradually as we slide gently into the second, then
third tier.
And there will be plenty of excuses available to help us deny that
sunset has begun.
For example, when the newspaper contacted Member of Parliament Seah
Kian Peng for his comments regarding the survey results, he said,
"The figures may be right, but the conclusion could be wrong."
Rather than look at prices and wages in isolation, he says the key
consideration should be: Do Singaporeans lead a better life than they did in
the past and are the poor taken care of?
"If the answer to both is yes, then moving up or down two notches
becomes mere semantics," he says.
UBS has been doing this kind of survey triennially since 1971. In
2009, it covered major 73 cities around the world, fifteen of which are in
the Asia-Pacific region.
Prices - global ranking
Prices are computed from a basket of 122 items, based on a Western
European lifestyle. The mix can be seen in the table at right. Some may ask
how representative his basket is compared to the Singapore lifestyle, but
seeing how westernised Singaporeans have become, I don't think it makes much
of a difference.
Singapore was ranked 24th out of 73 cities worldwide, only slightly
cheaper than Amsterdam (rank 23) and London (rank 21). Tokyo was 5th out of
73 cities and Hong Kong 28th.
Three years earlier, Singapore's price-ranking was 32. We climbed 8
places in the interim period, not the "two notches" that Seah spoke about.
If one adds rent to the basket, Singapore shoots up the 2009 worldwide
rankings from 24th (basket without rent) to 15th place (basket plus rent),
making us MORE expensive than London and Amsterdam. Tokyo goes up to 3rd
place. Hong Kong shoots up even more dramatically than Singapore to 11th.
Wages - global ranking
Wages are calculated from averages from 14 common occupations ranging
from unskilled (e.g. building labourer) to engineers and department heads.
UBS' report explained in its introduction that:
The data we collected includes standard local incomes and working
hours in addition to local consumer prices. The survey asked 112 questions
on wages, payroll taxes and working hours for 14 separate occupations. The
survey was conducted with a representative sample of companies, and
participants profiles were defined with maximum specificity with respect to
marital status, work experience and education.
In the net wages ranking, Singapore was placed 41st out of 73 cities,
thus the word "middling" I used above.
* * * * *
Comparing with Asia-Pacific cities
To better show where we stand in relation to our neighbours, the
charts below refer to the fifteen Asia-Pacific cities included in the
survey.
The first chart shows the relative price of the basket of 122 items,
without rent, indexed to the price of the same basket in New York. Singapore
is in second place, with Hong Kong very close.
If we look at wage levels from the 14 occupations, Singapore is
nowhere near second place. We stand lower than Seoul and Taipei, and we're
only twice the level of wages in Shanghai. We've been surpassed, with others
catching up.
(Note: the chart is based on net wages, which means wages net of
taxes, social security contributions, etc)
Purchasing power is a function of wages and prices. Since we have high
prices and middling wages, the purchasing power is not a pretty sight. We
rank 8th out of 15 Asia-Pacific cities. Even the average guy in Kuala Lumpur
can afford a better standard of living than us.
* * * * *
Why prices so high?
What is wrong with prices in Singapore? It's hard to say. The survey
does not contain enough data for us to tease out the problem. It may also
fail to account for quality. Take, for instance, this chart showing the
price of public transport:
As you can see, Singapore is one of the more expensive places, but
you'd have to be blind to think that the quality of public transport in
Manila or Mumbai is anything comparable to Singapore's.
However, the next chart may give us a clue as to how prices are pushed
up. On the left is the number of minutes the average person must work to
earn enough to buy 1 kilogram of uncooked rice. On the right is the number
of minutes of work needed to buy one McDonald's Big Mac.
Most places require less than twice the working time to buy a Big Mac
compared to buying 1 kg of rice. Singapore is one of the few places that
requires more than twice, in common with cities like Jakarta, Kuala Lumpur,
Manila and Mumbai -- not quite the set we normally imagine ourselves to
belong to.
What differences are there between uncooked rice and a Big Mac? Rice
has far fewer domestic inputs. We buy what has been imported, adding on a
little cost for storage, transport and retail space. Thus our purchasing
power over rice is really derived from the strength of the Singapore
Dollar's exchange rate.
A Big Mac includes many more domestic cost inputs. The buns are baked
locally, there is the rental cost of kitchen and dining space, power and
water, plenty of staff, disposal of trash, licences, etc. It appears that
our purchasing power is degraded by our own domestic cost inputs.
Another look at domestic cost inputs can be found in services. The UBS
survey has this to say:
Service prices reflect local labor costs
To compare global service costs as accurately as possible, we
analyzed a basket of 27 services. They ranged from classic expenses such as
haircuts, phone charges, dry cleaning, movie tickets and restaurant meals to
newer services of everyday consumption, including DSL Internet, training and
continuing education courses and tickets for a variety of leisure
activities. We have responded to the broader changes in consumption habits
by increasing the weight of services in our study from 20% to 22% in our
total basket of goods and services.
Here are the fifteen Asia-Pacific cities:
As you can see, Singapore is the second-most pricey of the lot. Does
this mean that our wages are high? Despite what UBS wrote, not necessarily.
What you pay in the price of services ultimately goes to more than wages; it
also goes to corporate profit and reinvestment as well as to the government
in the form of taxes and levies (including the Development Charge, which in
turn pushes up rents), and used for paying a bureaucracy, the military and
infrastructure investment. It can also be parked away through surpluses as
reserves.
As shown in the second chart above (wages), our wages aren't the
second highest in the Asia-Pacific. This suggests that the (second highest)
price of services here reflect more the elements of corporate profits and
government take. Our workers do not benefit commensurately form the high
price charged for services. Corporate profits may be kept up through the
lack of competition while the slice taken by the government stems from
political decisions.
How true is this? Economists might want to study the matter.
* * * * *
Four occupations
Now, let's look at the wages computed for four occupations. The next
two charts show data for a car mechanic and a cook:
The Singaporean car mechanic is paid significantly less than his
counterpart in Hongkong, also less than the guy in Taipei, and not much
differently from the mechanic in Seoul.
The Singaporean cook earns less than the guy in Seoul too.
The next two charts look at the higher end of the job scale: product
managers and engineers.
Among product managers, the Singaporean one is paid third highest
among the 15 cities; among engineers, fourth highest.
Our economy seems to be one where we have an extraordinary gap between
the powerful and the powerless, even by Asian standards -- countries not
known for soft-hearted socialism. Average wages for Singapore as a whole are
pulled down the city rankings because our low-paid are so lowly paid.
Meanwhile, one suspects that our prices seem to be kept up not so much by
labour costs but by profit-taking and the government's share.
With the resulting degradation of purchasing power, one can then ask:
Is the average Singaporean really having it so good?
© Yawning Bread
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